Where to invest money? Here are some options

People have various financial goals and to help achieve them there are a plethora of investment options available in the market. However, this makes it difficult for us to decide where to invest.

1.Public Provident Fund (PPF)
PPF is one of the safest options as it is a government-backed scheme. This fixed income product enjoys the exempt-exempt-exempt (EEE) status because the amount invested is deductible from your income before calculation of tax as per section 80C of the Income Tax Act, and interest earned and maturity amount are tax-exempt. You can open a PPF account with either a post office or bank.

2.Fixed deposits (FD)
This is another fixed income product. One can invest either in a bank FD or company FD, or both. The minimum investment amount, tenure, and interest rate offered on FDs vary among banks and companies. There is no maximum limit on the investment amount. Generally, company FDs offer higher interest rates as compared to a bank FD but risks of investing in company FDs are usually higher.

3.Equity shares or stocks
Investing in equity shares is known to be risky. Therefore, one must have knowledge on how to analyze a particular stock before making any investment decision.

4. Mutual funds
stocks can take the mutual funds (MFs) route. MFs invest not only in equities but also in various other asset classes such as bonds, gold, and so on. Mutual funds are managed by fund managers who have professional knowledge about investing in a different asset class.

5.Recurring deposits (RDs)
If you wish to deposit money at regular intervals while looking for safety, RD can be an option for you.

6.Post office savings schemes
Other than the PPF and RD, the post office offers various other schemes. These include time deposits, Senior Citizens Savings Scheme, Monthly Income Scheme, Kisan Vikas Patra, and National Savings Certificate.

7. Unit-linked insurance plans (Ulips)
Ulips offer insurance and investment under a single plan. It invests both in debt and equities. However, there are several charges that one needs to know as they affect your maturity amount. The maturity amount is tax-exempt as per current laws. Withdrawals are allowed only after expiry of the five-year lock-in period.

8.Sukanya Samriddhi Yojana (SSY)
Parents of a girl child can invest in SSY for higher education and marriage purposes. The scheme was launched under the government’s ‘Beti Bachao Beti Padhao’ campaign. The account can be opened at any post office or authorized bank branch. It has a lock-in period of 21 years. Partial withdrawals are allowed subject to certain conditions. You can invest a minimum of Rs 1,000 and a maximum of Rs 1.5 lakh in a financial year.

9.National Pension System (NPS)
Those who want a pension in their retirement years can choose to invest in NPS. It is a defined contribution pension system where your contribution is invested in a mix of assets – equity, corporate bonds, government securities, and alternative investment funds – as per your choice. Anyone between the age of 18 years and 60 years can join the scheme.

10.Gold
Although gold does not yield consistent returns like FDs, it is one of the most popular investment options for Indians. This is because gold is seen as something that can offer safety and stability during uncertain times.

11.Bonds
There are various types of bonds such as zero-coupon bonds, tax-free bonds, taxable bonds, PSU bonds, 7.75% RBI Bonds. Features of these bonds vary, therefore, before investing one must know the minimum investment amount, tenure, taxation on interest and maturity amount, and liquidity. You can buy those bonds for the first time whenever the government or issuing company opens its subscription or from the secondary market.

12.Real estate
You can buy a property to live in or as an investment to earn rental income and/or sell it at later date to make capital gains. Price of a house varies with size, locality, location, and the state of the real estate market when you are buying or selling your house. While people have reportedly made huge gains in real estate, there are several risks involved such as untimely delivery, the risk of fraud in sale/purchase, low liquidity, the fact that it cannot be sold as sub-units etc. Further, Acc.

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